Tariff war touches the Five Towns


As the tariff war between China and the Unites States remains heated, businesses in the Five Towns have felt the pinch. Should President Trump follow up on his threat to impose 25 percent tariffs on China, the impact would more than likely be even greater.

Trump threatened to impose tariffs when he campaigned for the presidency. Since his election, he has imposed tariffs on Canada and China and now threatens to do the same with Mexico. With the focus on China, however, three businesses in Cedarhurst have begun to see the impact.

A tariff is a tax on imports or exports between nations, and a way of regulating foreign trade to promote or protect domestic industry.

Sandy Tau, owner of AHC Appliances, on Central Avenue, said that many of the manufacturers her business buys from have raised prices several times since the beginning of the year. Noting that those increases are passed on to customers, Tau said she has seen a change in retail purchasing behavior.

“Customers are choosing to wait for the big holiday sales or repair their existing appliances,” she said. “We will see another price increase over the next few months. Consumers are paying up to 25 percent more not just for appliances, but for everyday goods such as shoes, diapers and coffee.”

To reduce the impact of price increases, Tau said, AHC, in partnership with its manufacturers, is offering several promotions and “very competitive pricing.” “We’ve been in business for over 20 years, and at the core we’re all about servicing our customers to the best of our ability,” she wrote in an email. “With the new tariff going into effect, the media is (rightfully so) encouraging consumers to make their purchases between now and Labor Day. There’s enough inventory in the appliance industry to fill the consumers’ needs through the summer.”

On Columbia Avenue, Jerry Bloomberg, owners of La Toys Etcetera, said the tariffs have yet to impact his store, but added that electronics companies and toy manufacturers have been affected by 10 percent tariffs on Chinese products because, he noted, “These manufacturers have razor-thin margins.”

Tariffs will be a prominent topic of discussion at the American Specialty Toy Retailing Association convention in Chicago June 9 to 12, Bloomberg said. The international nonprofit trade group serves more than 1,800 independent manufacturers and sales representatives in the specialty toy industry.

Steve Silverman, of Morton’s Army Navy Store on Central Avenue, said that he and a couple of his vendors are absorbing the higher costs of some merchandise, such as trunks for the summer camp season. More than likely, that will not continue should 25 percent tariffs kick in, he said. “We order in advance and can maintain costs this year, but next year is another story,” Silverman said. “The next six months down the line, wholesale costs will increase.”

Dr. Richard Vogel, an economist and the dean of Farmingdale State University’s business school, said that Trump’s calling for and then implementing tariffs is a policy “running counter to the whole direction the economy was moving — the U.S. and globally — for several years.”

Vogel noted that the “connectivity between countries and economies” in the global supply chain serves every country well, and tariffs could only harm that connectivity. “I see more digging in, [and] unless one or both parties are willing to negotiate and give way somewhere, [I’m] not sure I see a lot of movement,” he said. “High tariffs are not especially effective, as they raise prices for consumers and protect a few large companies.”

The perspective of the Cedarhurst businesspeople isn’t much different. “I think Trump is playing a dangerous game of chicken,” Silverman said. “There’s a lot of risk involved. He tends to do things to antagonize and intimidate. Some people [get scared], other people push back. China is big enough to push back.”

“We want what’s best for the country,” Tau said. “In the meantime, we’ll continue to do our best and provide customers with pricing that is competitive and appliances that will outlast the tariff wars.”

Gabby Brailovskiy and Shira Frankel contributed to this story.

Have an opinion about how tariffs impact local businesses? Send your letter to the editor to jbessen@liherald.com.